We’re here today with Rick Yeates, Managing Director Middle Island Resources. Rick thanks for your time. Are you able to explain some of the background of Middle Island?
Rick Yeates: [00:00:14] Yes indeed David. Middle Island was listed in late 2010 and with a focus very much at that time on West Africa and we identified resources and made some significant discoveries on our projects in West Africa.
But market circumstances changed to some extent and we shrunk our activities over there in response to that and we’re very much focused on a project called Rio in Burkina Faso. And another project in Niger that surrounded the Samira Hill gold operation.
We approached the then owner of Samira Hill, being Semafo, to acquire that project. And regrettably the government intervened and cruelled that deal and then proceeded to expropriate our resources adjacent to that mill.
And so as a consequence we wanted to mitigate shareholder exposure to sovereign risk and we refocused back in Australia at that time and over 12 months ago we acquired the Sandstone Gold project in Western Australia which is our current focus and that’s centred on the former assets of Troy Resources in that area.
So we’ve got two fully-permitted mining leases that we have 100% interest in, plus 100% interest in a 600,000 tonne premium gold processing plant. And we’ve recently acquired, or executed, a couple of option agreements over adjacent resources and exploration potential to consolidate that project.
David Tasker: [00:02:01] A very prolific area for gold.
Rick Yeates: [00:02:04] Certainly, a very prolific area for gold. Sandstone is known as a high grade field and certainly a very well-known nugget field.
So in fact we have recently executed a tribute agreement with a prospector who is finding significant nugget gold on the project. However, that is not our focus.
It’s beer money not a lot more but we are very much focused on recommissioning that operation and extending and enhancing the production profile for that operation.
David Tasker: [00:02:38] And some of the recent milestones of the company.
Rick Yeates: [00:02:41] Look, I guess we completed a PFS back in December last year. So quite soon after we acquired the project and we put together two to three years of reserves or inventory we’ll call them at the moment inventory and completed a PFS study.
Some of those elements were to BFS level, but the remainder PFS level. It became apparent that while the project worked on an operating basis once you brought that capital to account and I’m talking about refurbishment cost, plus preproduction mining contract immobilisation and so on that project didn’t quite cut it.
So rather than proceed with what was then a marginal project in the hope of generating cash flow to extend and enhance the production profile we elected to extend and enhance the production profile before committing to a recommissioning decision.
So the last 12 months really has been about back to the drill bit and we’ve completed a number of drilling programs. Several of them are very successful and we’ve just completed another four for which results are pending.
So there’ll be plenty of news flow coming through shortly and a couple of those opportunities are potential triggers for that rig recommissioning.
So we are eagerly awaiting the results of those. A couple more and more brownfields underground targets that would look more at extending rather than enhancing the production profile.
But we’re very confident we’ve grown the production profile significantly over the last 12 months. And one of those targets which is Two Mile Hill tonalite is looking to be a very very substantial beast. It’s 250 metres long.
It’s about 80 to 90 meters wide. We’ve drilled it to at least 500 metres and it’s mineralised from end to end, top to bottom, wall to wall. And so we put out a 415 metre drill intercept a couple of months ago and one of the drilling programs we’ve just completed involves extending that hole.
We’d hope to get to at least 850 potentially a thousand metres. Unfortunately we ran out into the Hanging Wall at about 740 metres but very strong mineralisation within the tonalite before we did. So you know certainly very encouraged by that. But it’s underground bulk mining, by definition it’s extending the production profile rather than enhancing it.
Two of the other programs are focused on open pit material which we believe could provide potential triggers for that recommissioning decision. And we’d like to think that we’d be in a position to at least review that recommissioning decision in December this year.
David Tasker: [00:05:40] It’s been a busy 12 months for Middle Island and clearly a busy 6 to 12 months ahead. Rick thanks for your time.